Possible disadvantages of state capitalism

Personally, if limited to the options presented in Fukayama's The End of History and the Last Man, my favorite economic system would be Liberalism. It is a nullity with individual liberty and personal initiative tossed inside, the remnant of social order after all other systems have been destroyed by dialectical interaction over the course of history. It works pretty well, is broadly defined and is by far the preferred socioeconomic system today.

However, feudalism gets a bad wrap from movies. It had its advantages. Responsibilities and obligations were mutual up and down the social hierarchy. It wasn't all Droits du seigneur (which was BS), plagues, witch hunts and dirt farming.

Wars very rarely involved civilians like they do today. Social security was also a good deal better. You were linked to your land or work, but you were sure to have it. Non can take land from you without a good cause (like treason). Taxes were much lower than today. The "oppressive" taxation amounted to 10-15% of a typical income for personal protection and guild services. Finally, feudalism was built entirely on voluntary contracts and was a substantial improvement over the chaos of the Roman collapse before it and the anarchy of the European revolutions after it. Overall it deserves another look.

Weird I never thought of guilds as a good thing but I'll admit I don't know a ton about them. From the Wikipedia article on them.

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As Ogilvie (2004) argues, the guilds negatively affected quality, skills, and innovation. Through what economists now call "rent-seeking" they imposed deadweight losses on the economy. Ogilvie says they generated no demonstrable positive externalities and notes that industry began to flourish only after the guilds faded away. Guilds persisted over the centuries because they redistributed resources to politically powerful merchants. On the other hand, Ogilvie agrees, guilds created "social capital" of shared norms, common information, mutual sanctions, and collective political action. This social capital benefited guild members, even as they hurt outsiders.

Sounds good for them but nobody else, and I say this as a person who's bulk of working career has been in the trades!

Actually that's only the case today, social mobility in modern America is lower than ever. Feudalism instead builds a strong guild-based middle class (anti-worker nonsense aside) where members can work toward manumission, and are guaranteed to rise up in their profession in any case.

Guilds then were pretty much what unions are today: good for the members, bad for everyone else.

Standards of living, life expectancy, and pretty much any measure you can think of were significantly lower during Feudalism than they are today. Yes, that's a function of technologies and not the economic/social order, but that's part of the point: capitalism has brought with it a tremendous and unprecedented wave of innovation that has brought great benefits. You can't have that in a Feudalistic system.

capitalism has brought with it a tremendous and unprecedented wave of innovation that has brought great benefits. You can't have that in a Feudalistic system.

There's little reason why not. Economic development under feudalism strengthened the nation-state that went on to hold on to power for centuries. The fact that another system forcibly triumphed over voluntary feudal contracts doesn't mean feudalism somehow hinders innovation or progress. Manorialism is actually a more market based approach to public goods provision than government bureaucracy.

Personally, if limited to the options presented in Fukayama's The End of History and the Last Man, my favorite economic system would be Liberalism. It is a nullity with individual liberty and personal initiative tossed inside, the remnant of social order after all other systems have been destroyed by dialectical interaction over the course of history. It works pretty well, is broadly defined and is by far the preferred socioeconomic system today.

However, feudalism gets a bad wrap from movies. It had its advantages. Responsibilities and obligations were mutual up and down the social hierarchy. It wasn't all Droits du seigneur (which was BS), plagues, witch hunts and dirt farming. Under the guild system the professions have never had it so good, there is a lot to commend a system which insured the highest quality produce at a fair price.

Wars very rarely involved civilians like they do today. Social security was also a good deal better. You were linked to your land or work, but you were sure to have it. Non can take land from you without a good cause (like treason). Taxes were much lower than today. The "oppressive" taxation amounted to 10-15% of a typical income for personal protection and guild services. Finally, feudalism was built entirely on voluntary contracts and was a substantial improvement over the chaos of the Roman collapse before it and the anarchy of the European revolutions after it. Overall it deserves another look.

It was all voluntary contracts until daddy died. Then you inherited whatever situation he had gotten you into. You were subject to the lord he had contracted to serve. If you were serf, you were very much stuck. The lord could force you to serve on his land. There was no renegotiation if you didn't like the deal. The only form of collective bargaining was a peasant revolt, which would be put down as brutally as the lord felt was necessary.

It was all voluntary contracts until daddy died. Then you inherited whatever situation he had gotten you into. You were subject to the lord he had contracted to serve. If you were serf, you were very much stuck. The lord could force you to serve on his land. There was no renegotiation if you didn't like the deal. The only form of collective bargaining was a peasant revolt, which would be put down as brutally as the lord felt was necessary.

But it wasn't nearly as nonnegotiable as the bad rap it gets. Rents were quite low, similar to what they are now, and the courts were generally independent and fair.

The heritability of contracts shouldn't be surprising either considering that citizenship in a nation-state works the same way. You're born a citizen of a country and can't give it up unless the government releases you. In feudalism there was actually a justification for that contract however because a lord can't just have people born to occupy and live off their land without some kind of agreement on children's right to do so.

Weird I never thought of guilds as a good thing but I'll admit I don't know a ton about them. From the Wikipedia article on them.

Quote:

As Ogilvie (2004) argues, the guilds negatively affected quality, skills, and innovation. Through what economists now call "rent-seeking" they imposed deadweight losses on the economy. Ogilvie says they generated no demonstrable positive externalities and notes that industry began to flourish only after the guilds faded away. Guilds persisted over the centuries because they redistributed resources to politically powerful merchants. On the other hand, Ogilvie agrees, guilds created "social capital" of shared norms, common information, mutual sanctions, and collective political action. This social capital benefited guild members, even as they hurt outsiders.

Sounds good for them but nobody else, and I say this as a person who's bulk of working career has been in the trades!

It's hard to agree with Ogilvie's argument. For their downside, the guilds also made sure that people who lacked genuine qualifications were not allowed to represent themselves as skilled tradesmen.

Ogilvie says they generated no demonstrable positive externalities and notes that industry began to flourish only after the guilds faded away.

Nowadays, I'm inclined to look a little more closely at claims like this: If millions of people live in grinding poverty, cranking out widgets on assembly lines, is industry "flourishing?" Flourishing by what metric?

There's no question that mass production has brought us enormous benefits, but economic output is far from being a perfect indicator of social flourishing. I mean, from a purely detached economic standpoint, the "ideal" policy would be to increase population until the marginal resource cost of keeping someone alive for an optimal duration equaled the lifetime economic output of the average person.

But I feel fairly confident that living as the average Joe in that state of affairs would suck hardcore.

Weird I never thought of guilds as a good thing but I'll admit I don't know a ton about them. From the Wikipedia article on them.

Quote:

As Ogilvie (2004) argues, the guilds negatively affected quality, skills, and innovation. Through what economists now call "rent-seeking" they imposed deadweight losses on the economy. Ogilvie says they generated no demonstrable positive externalities and notes that industry began to flourish only after the guilds faded away. Guilds persisted over the centuries because they redistributed resources to politically powerful merchants. On the other hand, Ogilvie agrees, guilds created "social capital" of shared norms, common information, mutual sanctions, and collective political action. This social capital benefited guild members, even as they hurt outsiders.

Sounds good for them but nobody else, and I say this as a person who's bulk of working career has been in the trades!

It's hard to agree with Ogilvie's argument. For their downside, the guilds also made sure that people who lacked genuine qualifications were not allowed to represent themselves as skilled tradesmen.

The problem is you can only get in if you have connections and the restrict anyone who they don't want and don't allow self taught individuals to work in the trade (as far as I know) they also restrict information and kept secret their methods. I ran into the same thing with unions and have never liked them and how restrictive they can be. Working on a job site as a laborer I was only allowed to us a hammer to pull nails never to assemble anything. Didn't matter how much previous training and experience I had with the business end of a hammer. Thankfully only commercial/industrial construction is union run, I prefer residential anyway.

I understand what you mean about keeping unskilled people from doing work they aren't qualified to do. Think of it with a programming and computer work, look at how many people self taught/studied and do great work. Imagine you COULDN'T learn programming or working on computers on your own cause all the knowledge was locked up in guilds and you could never find work even if you did have it because they restricted you from any opportunities.

But it wasn't nearly as nonnegotiable as the bad rap it gets. Rents were quite low, similar to what they are now, and the courts were generally independent and fair.

The heritability of contracts shouldn't be surprising either considering that citizenship in a nation-state works the same way. You're born a citizen of a country and can't give it up unless the government releases you. In feudalism there was actually a justification for that contract however because a lord can't just have people born to occupy and live off their land without some kind of agreement on children's right to do so.

Rents were low because most people in a feudal society are dirt poor and live in shacks. In feudalism most people are born to be peasants, working the fields until they drop dead from exhaustion, hunger, disease, or old age.

The only people who benefit in a feudal society are the most ruthless and connected, able to extract favors from their rulers. The whole system is based on the threat of violence against anyone who steps out of line, or moves attempts to move from their station.

This is probably why all feudal like societies that remain in the world today are controlled primarily by warlords.

However, feudalism gets a bad wrap from movies. It had its advantages. Responsibilities and obligations were mutual up and down the social hierarchy. It wasn't all Droits du seigneur (which was BS), plagues, witch hunts and dirt farming. Under the guild system the professions have never had it so good, there is a lot to commend a system which insured the highest quality produce at a fair price.

Wars very rarely involved civilians like they do today. Social security was also a good deal better. You were linked to your land or work, but you were sure to have it. Non can take land from you without a good cause (like treason). Taxes were much lower than today. The "oppressive" taxation amounted to 10-15% of a typical income for personal protection and guild services. Finally, feudalism was built entirely on voluntary contracts and was a substantial improvement over the chaos of the Roman collapse before it and the anarchy of the European revolutions after it. Overall it deserves another look.

Are you actually arguing that feudalism was an improvement on the Roman Empire?

Guilds then were pretty much what unions are today: good for the members, bad for everyone else.

Standards of living, life expectancy, and pretty much any measure you can think of were significantly lower during Feudalism than they are today. Yes, that's a function of technologies and not the economic/social order, but that's part of the point: capitalism has brought with it a tremendous and unprecedented wave of innovation that has brought great benefits. You can't have that in a Feudalistic system.

No, it's war. War brought us tremendous and unprecedented wave of innovation. WWI and WWII brought us the technology, rockets, etc,. The Cold War and the space race (for fear of Russia dominating the moon or space for war purposes) drove the technology to get us there. Nuclear bomb, nuclear power. Jet engine. What else... computers. Errr... there's that thing that was invented in WWI or WWII that allows for cell phones to work. Handshaking something or the other. I forget.

Capitalism on it's own can't do much. HK is as close you'll get to a pure capitalist economy. The one thing that can be said about capitalism, is that we come out of recessions faster. In fact, HK and Singapore are seen as markers for when a global economic recession is going to be over, because HK and Singapore always bounce back first.On the other hand, the US which could be argued is a war like economy mixed with capitalism - think about it, the US spends so much on military spending, more then the next 12-14(?) nations combined, it's virtually an economy of a country that would be at war. And I heard an interesting figure, which I've been looking for confirmation since I heard it, that the US is the only country in the world that has been at war more times then any other country in the last 60 years (since WWII effectively). It's nearing midnight here so my thoughts are a little scattered. But your views on capitalism is extremely simplistic.

However, feudalism gets a bad wrap from movies. It had its advantages. Responsibilities and obligations were mutual up and down the social hierarchy. It wasn't all Droits du seigneur (which was BS), plagues, witch hunts and dirt farming. Under the guild system the professions have never had it so good, there is a lot to commend a system which insured the highest quality produce at a fair price.

Wars very rarely involved civilians like they do today. Social security was also a good deal better. You were linked to your land or work, but you were sure to have it. Non can take land from you without a good cause (like treason). Taxes were much lower than today. The "oppressive" taxation amounted to 10-15% of a typical income for personal protection and guild services. Finally, feudalism was built entirely on voluntary contracts and was a substantial improvement over the chaos of the Roman collapse before it and the anarchy of the European revolutions after it. Overall it deserves another look.

Are you actually arguing that feudalism was an improvement on the Roman Empire?

If you want more information, I suggest H. Hoppe, Monarchy and Feudalism.

In what possible way did he equate being born into serfdom, and thus stuck with serfdom, with a voluntary contract?

Are you familiar with the term "manumission"? Manumission documentation is one of the tools people into tracking ancestry use to identify immigrants from feudal parts of Europe. Why, if feudalism was voluntary, would manumission be needed for these people to have left their lawful lord's demesnes?

Obviously, but that's because Feudal lords had only to provide a tiny fraction of the services that we expect of modern governments and has nothing to do with how feudalism works but everything to do with when feudalism was prevalent.

Are you actually arguing that feudalism was an improvement on the Roman Empire?

That really depended on what part of society you belonged to.

An improvement in that being a serf was to varying degrees better than being a slave depending largely on what country you lived in and who your landlord was. British and German serfdom was probably the best of the bunch and was reformed earlier than most places. Serfdom had a wide range of meaning. In Russia, serfdom was almost indistinguishable from slavery until shortly before the Czar was overthrown.

Marx did write nostalgically of serfdom only in the sense that the theory, like his own, sounded better on paper than unfettered capitalism. The more compelling argument though is that the serfs of Europe in their conversion to free laborers for the industrial revolution did not get their fair share of the wealth. Basically the aristocrats kept all the land (ie. Capital) and the only thing the serfs got was freedom without any job security.

What capitalism is in danger of producing in the United States is debt peonage especially in regards to student loans which are not dis-chargeable in bankruptcy. We have also created a multi-tier legal system in the US. Corporations, their executives and shareholders are basically immune from individual consequences for their actions, even blatant criminal conspiracies. The poor have found that its basically illegal to be poor and are put on the fast track to mass incarceration with only pro-forma attempts at due process and no rational balance between the crime and the punishment or whether society is served by the incarceration vs their freedom.

When the AG publicly admits that punishing a big bank that has committed felony acts will do more harm to our economy than the interest of justice would benefit society, it is only a small leap for a wealthy individual or any business to claim that they ought to be immune from punishment simply because of their economic position. Pretty soon the argument is that the victim of the crime is less important than the perpetrator which is basically feudalism in the sense that short of cruelty or incompetence so widespread that the people take matters into their own hands, feudal lords were basically immune from prosecution for acts committed against commoners. You only have to look at the monarchies and sheikdoms of the modern Middle East to see what happens there. It is not uncommon for even distant relations to the ruling family to rape, murder and steal from ordinary citizens with impunity throughout Saudi Arabia, Kuwait and even the supposedly modern UAE.

In what possible way did he equate being born into serfdom, and thus stuck with serfdom, with a voluntary contract?

Are you familiar with the term "manumission"? Manumission documentation is one of the tools people into tracking ancestry use to identify immigrants from feudal parts of Europe. Why, if feudalism was voluntary, would manumission be needed for these people to have left their lawful lord's demesnes?

Sure, by some definitions hereditary contracts don't count, and if you want to go with that definition, there's nothing else I can say. But the original vassalage was always voluntary. Just like people are entitled to restitution for property stolen from their kin, voluntary contracts can cross generations.

Modern social security has your back if something terribly wrong happens to you.As a serf, if you got crippled and for some reason (and damn were they many of those reasons at that time) you didn't have family willing to take care of you, well, you died in a ditch.

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the supposedly modern UAE

The UAE is nothing more than a barbaric medieval feudal state hidden behind a small coat of modernism paint. Been there, hated it.

Modern social security has your back if something terribly wrong happens to you.As a serf, if you got crippled and for some reason (and damn were they many of those reasons at that time) you didn't have family willing to take care of you, well, you died in a ditch.

But that's what people did. You had land and a family to take care of you unlike today where the services that family and the Church used to provide have been handed over to the government. It was actually a more solid safety net than under liberalism.

Not remotely. I encourage you to actually read up on Feudalism instead of posting about it from a completely uneducated standpoint.

I have. I'm not saying living standards were as high as they were now obviously because those are different periods in history (although they were substantially worse for a long time after feudalism ended). But as a system, feudalism had a lot more going for it than people assume.

Feudalism actually still exists, officially informally in many places in Africa, Pakistan, even India. Generations of families are born, bonded to the land, forced to work for their feudal master, their children do not receive education, and they make only enough money to keep themselves from starving. This is otherwise known as modern slavery. The only person feudalism works well for is the feudal lord.

Not remotely. I encourage you to actually read up on Feudalism instead of posting about it from a completely uneducated standpoint.

I have. I'm not saying living standards were as high as they were now obviously because those are different periods in history (although they were substantially worse for a long time after feudalism ended). But as a system, feudalism had a lot more going for it than people assume.

Given your statements here that is not believable. You claim that you had land and a family or the church to take care of you when those things were true only for a small subset of the population. The vast majority of people in feudal Europe were essentially destitute with the wealth produced by the people confiscated by the non-productive landlords (read Adam Smith) under threat of violence.

capitalism has brought with it a tremendous and unprecedented wave of innovation that has brought great benefits. You can't have that in a Feudalistic system.

There's little reason why not.

Of course there is. In a feudal system, there's no incentive to innovate or for that matter, produce efficiently; vassals don't get to keep any extra crops they may produce, let alone acquire land (the means of production).

Not surprisingly, therefore, rate of technological & economic development under feudalism was much slower under feudalism than under any of the large-empire systems that preceded or followed it (Roman Empire, Persian Empire, Mongolian Empire, Chinese, Assyrian, Babylonian, Egyptian... you name it)

The guilds were a fairly small class population-wise; for the most part, they were more like the skilled blue-collar workers of the 1950s than what we think of today as the "professional" white-collar middle-class. The vast majority of the population was serfs.

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Economic development under feudalism strengthened the nation-state that went on to hold on to power for centuries.

You have that backwards. There were no nation-states in Europe in the modern sense until the late 18th century, when the industrial revolution was already long underway; the demise of feudalism is what made their rise possible in the first place.

Sounds to me like you are relying too much on a single book or two that present theories, but without a lot of primary materials... Do yourself a favor, and study primary materials from the periods involved and more direct studies.

Modern social security has your back if something terribly wrong happens to you.As a serf, if you got crippled and for some reason (and damn were they many of those reasons at that time) you didn't have family willing to take care of you, well, you died in a ditch.

But that's what people did. You had land and a family to take care of you unlike today where the services that family and the Church used to provide have been handed over to the government. It was actually a more solid safety net than under liberalism.

Honestly I don't know a ton about that time period but I'm thinking you may be delusional. If you had no family or none willing to take care of you and you didn't believe in god or what to convert or submit to the church's will. Who exactly was going be helping you? Besides begging?

I'm totally with you that Capitalism isn't all it's cracked up to be in every case but do suggest feudalism as an alternative? Really?

After reading this thread, I've done some reading to re-acquaint myself with the middle ages. I've discovered that one problem with arguing about the merits of Feudalism is that Feudalism, as most people define it, never existed. It was a post-medieval construct of 16th and 17th century scholars.

Feudalism was not the "dominant" form of political organization in medieval Europe. There was no "hierarchical system" of lords and vassals engaged in a structured agreement to provide military defense. There was no "subinfeudation" leading up to the king. The arrangement whereby serfs worked land for a lord in return for protection, known as manorialism or seignorialism, was not part of a "feudal system." Monarchies of the early Middle Ages may have had their challenges and their weaknesses, but kings did not use feudalism to exert control over their subjects, and the feudal relationship was not the "glue that held medieval society together."

In short, feudalism as described above never existed in Medieval Europe.

The feudalism model was popular because it simplified medieval society. But medieval society wasn't really simple. The more historians have learned over the last century, the clearer this has become. In the Middle Ages . . .

Society wasn't as rigid as it was once believed; there was such a thing as social mobility.

Women had more power and rights than was originally deduced from reading sources written by monastics who rarely saw any women, let alone interacted with them.

The charming triangle of "those who fought, those who prayed, and those who worked," which was actually devised as a description of society during the Middle Ages, does not take into account a wide variety of people who lived in and contributed to medieval communities. And . . .

Fighting men were not limited to knights who swore fealty to their lords and received land in return; there were paid mercenaries, archers, miners, foot-soldiers, and a host of other types of combatants who participated in the fierce and frightening conflicts of medieval battles under a variety of conditions.

Modern social security has your back if something terribly wrong happens to you.As a serf, if you got crippled and for some reason (and damn were they many of those reasons at that time) you didn't have family willing to take care of you, well, you died in a ditch.

But that's what people did. You had land and a family to take care of you unlike today where the services that family and the Church used to provide have been handed over to the government. It was actually a more solid safety net than under liberalism.

This made me laugh. How do you come up with shit like this? Do you actually believe this to be true, or do you have another agenda?

After reading this thread, I've done some reading to re-acquaint myself with the middle ages. I've discovered that one problem with arguing about the merits of Feudalism is that Feudalism, as most people define it, never existed. It was a post-medieval construct of 16th and 17th century scholars.

Feudalism is just a "system" of voluntary contracts that existed before the state came into being. If you take it to mean manorialism, vassalage or any specific contract then those certainly weren't universal because there were a variety of different property arrangements.

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Not surprisingly, therefore, rate of technological & economic development under feudalism was much slower under feudalism than under any of the large-empire systems that preceded or followed it (Roman Empire, Persian Empire, Mongolian Empire, Chinese, Assyrian, Babylonian, Egyptian... you name it)

This is an odd argument. Correlation is not causation. Economic development under feudalism gave rise to the nation-state, not the other way around. In fact technological development didn't really accelerate until the late 19th century when nation-states retreated from their disastrous protectionist trade policies imposed after feudalism.

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This made me laugh. How do you come up with shit like this? Do you actually believe this to be true, or do you have another agenda?

You have an odd definition of personal attack. I asked you questions. Is this something you believe, or do you have another agenda? You're throwing about vague statements with no backing of anything you're saying. So I find it a tad odd you're expecting me to do what you haven't done. According to you the Church and family provides a better safety net then the government under liberalism. It sounds more like subtext towards an agenda you have, as opposed to anything of substance.

Where's the historical context which backs up what you claim to be truth? Let alone actually explaining what you mean without generalities. What to you defines as a safety net? How did the church and family provide a 'more solid' version of it, as opposed to what is less substantial today. Come on, this isn't Discourse 101. You actually have to do more then just write one sentence and assume the burden is on us to figure out what you're saying. What am I arguing against? Your beliefs, or actual researched view points?

Honestly, go read Adam Smith's "Wealth of Nations", but don't just pay attention to the bits where he says things you like.

Adam Smith did not advocate land redistribution or disagree with the individual's right to engage in feudal contracts. You are referring to the third heading of Wealth of Nations where he discussed "first, natural impediments, and secondly, the oppression of civil government policies" of the early nation states.

There is nothing in his work advocating land reform, nullification of feudal contracts, or any of the measures advocated by the revolutionary left at the time to destroy feudalism. Rather, he spends the section criticizing state intervention in industry through subsidies and tariffs.